Private Loans
What is a private student loan?
Private student loans are obtained through lending institutions and are not part of the federally guaranteed student loan programs. In most cases, federally guaranteed loan terms and conditions are more favorable than terms and conditions for private loans. Care should be taken when choosing to use private loans as a tool. It is important to remember that student loans of any kind must ultimately be repaid.
Students have used private loans to cover a recent or past balances, to fund school related travel abroad or to help with qualified living expenses not covered by their federal student loan eligibility. Application for private loans is initiated by the student through a lending institution of their choice. Southwestern provides a preferred lender list that has been reviewed and selected by the financial aid team. The selection process and criteria are described here.
- Explore Lenders
- How are private loans different from Federal Direct Loans?
- What is the process to apply for a private loan?
- What is Southwestern's Loan Code of Conduct?
- How Does Southwestern Select Its Preferred Lenders?
Southwestern partners with Education Loan Management Resources (ELM) to provide you with ELMSelect - a tool that will help you compare the loan products on our preferred lender list. Explore Now!
*Students have the right to choose any lender that offers a private student loan, even if it is not on our preferred list.
How are private loans different from Federal Direct Loans?
Private loans do not carry a Federal guarantee like Federal Direct Loans and are subject to credit analysis. The interest rate and other terms of the loan may vary depending on the lending institution and the borrower's credit rating. Interest rates and loan fees can be fixed or variable. A variable rate fluctuates on a schedule determined by the lender. Similar to the Federal Direct Loan program, the student may elect to make interest-only payments on the loan while they are attending school.
What is the process to apply for a private loan?
The Financial Aid Team at Southwestern College recommends you first exhaust all Federal loan options at your disposal before choosing private loans as an option. Once you have decided that private loans are necessary, you should then research the loan terms offered by lending institutions to determine if you are comfortable with them. Once you have chosen a lender, the steps to apply are:
- Complete the loan application located on the lender's website. Unless you have excellent personal credit, most will likely need a credit-worthy co-signer (parent, spouse, grandparent, other close relative) to sponsor your loan application. Co-signers are responsible for repaying the loan should the borrower fail to make timely payments.
- Application passes through credit analysis.
- Application is sent to the school for school certification.
- Southwestern College verifies that the loan amount requested is within Federal guidelines.
- Student self-certifies the loan using a self-certification process provided by the lender.
- Once the self-certification is received, the student and Southwestern must complete a minimum fourteen-day mandatory waiting period, within which the borrower can cancel the loan.
- Funds arrive at Southwestern College and are applied to the student account.
Southwestern College Loan Code of Conduct
The Office of Financial Aid abides by the Kansas Attorney General's Student Loan Code of Conduct, which is:
Kansas Attorney General's Student Loan Code of Conduct
- Preferred Lender Guidelines - Preferred or suggested lender lists used by colleges will be based solely on the best interests of students and parents who may use the list, and without regard to the financial interests of the college. (Southwestern uses a preferred lender list.)
- Lender Disclosures - All preferred or suggested lender lists maintained by a college will clearly and fully disclose the criteria and process used to select the lenders included on such lists. The Southwestern process and criteria used are located here. Students and parents will also be told they have the right and ability to select a lender of their choice, regardless of whether the lender appears on a school's lender list.
- Revenue Sharing - Colleges will not accept anything of value from any lender in exchange for any advantage sought by the lender. Lenders will not be required or allowed to pay to be placed on a school's preferred lender list.
- Gifts and Trips - College employees will not accept anything of more than nominal value from any lender. This includes gifts or trips of any kind.
- Advisory Board Membership - College employees will receive no compensation or anything of value for serving on the advisory board of any lender.
- Lender Identification - No employee of any lender may work in or provide staffing in a college financial aid office. In addition, colleges shall direct employees of lenders to clearly identify themselves as employees of the lender and to never identify themselves as college employees when meeting or speaking with students or parents.
In addition, Southwestern College is a member of the National Association of Student Financial Aid Administrators (NASFAA) and acts in accordance with NASFAA's Statement of Ethical Principles and Code of Conduct for Financial Aid Professionals.
Southwestern's Preferred Lender List Procedure and Selection Criteria
Because of loan changes created by the Working Families Tax Cuts Act, signed into law on July 4, 2025, Southwestern College decided to provide students with a wider variety of funding by creating a preferred lender list. Prior to the 2026-2027 financial aid award year, Southwestern operated on an annually updated historical lender list. To create the preferred lender list, the following procedures and selection criteria are used.
Procedures
Beginning in October of 2025 and every three years after that, a Request for Information (RFI) is sent to providers of private student loan products. The deadline for submission of proposals is December 31. In January, the financial aid team begins a review of the submitted proposals. Lenders are evaluated according to specific criteria, and the list is finalized by March 1. Selected lenders are notified, and requests are sent in ELMSelect for their loan products to be displayed on the college's preferred list. A fully updated lender list is made available on ELMSelect by May 1. Following the three-year review, the list is reviewed annually by the financial aid team to ensure the lenders are still meeting the selection criteria.
Selection Criteria
Lenders are evaluated according to six different criteria: borrower coverage and access, loan terms and affordability, repayment flexibility and protections, application and student experience, compliance and transparency, and school partnership and reporting. Each proposal is evaluated on a mathematical scale on the basis of how well they meet each of the criteria. On a regular and ongoing basis, feedback is also requested from students and families on their experience with their chosen private lender.
